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Thank you and Good bye CEMJQ - Time to share the truth:
It was great pleasure to know some of you and made some good friends in the past 18+ months.
Weather you believe it or not, wally's letter was in right direction if you remember. No body from our EC questioned about project Cloud or discussed with cemjq management what are the offers on the table. I become very active one month before the BK hearing and I found out (they contacted me)that Lubrizol management met with Rogerson four times since Jan to buy industrial performance products division from Chemtura which was around a billion. I have been in touch with EC members and our council almost weekly sharing the information. I went to India and created a team of 10 people worked on giving demo's to invest in the Chemtura and I tried very hard to get us at least a dollar per share. I was able to succeed to present to reliance and four other parties in the short period of time. Unfortunately the time was very short. There is some more info which I cannot share publicly.
Unfortunately at the end of the day I have learned that our players did not play well with immaturity and greed. Screwed up the once in a life time chance. Remember under BK law, management need not reveal what offers they have got.
Rogerson screwed the shareholders by not selling the company and never revealed the buyout offer to the public. Judge was one sided and blind. EC players did not use the time properly to bring sugar daddy's to the table, it is too much for them to chew.
You can be greedy but play the game right - which never happened.
Well I have learned a lot in this process.
Thanks to all
Novachem
I may be dreaming:
The best way to maximize the shareholders value is to bring 7.5 multiples of the EBIDA which comes around $2362.5 million (Debtors numbers are 6.5 multiples ($2050 millions) which is low end of the market) and distribute shareholders around $1.85 to $2.10 (include or exclude based on the pension and KEIP numbers). At this juncture I believe investors (if they see the value of the company) does need to bring 1.1 billion to the table to have a meaningful dialog with debtors (remember SVP and Canyon: don't get greedy, share with others). By the way the debtors BOD has the fiduciary duty to maximize the value for all stakeholders other wise it gets into lot of litigation.
Other option is somebody needs to bring a total cash offer for the company with 7.5 multiples and offer shareholders around $1.85 to $2.10 per share.
Either case instead of doing a back door deal it would be good idea issuing a press release, which Debtors BOD has to respond publically.
On the other hand the debtors needs 1.913 billion (include the pension and KEIP numbers) and add 245million (which becomes 2158 million, remember the current value is stuck at 2050 millions) of the shareholder equity and all they need is 108 million more to get the shareholder value to 1.01, which forces the creditors to give 1.01 to the shareholders or loose the battle for mere 108 million. (245=67+70+108)
So the question is how to raise the 1.1 billion?
SVP and Canyon already raised 475 million and all they need is to have few more investores to add 625 million and I believe there are 6 investors already signed a confidentiality agreement with the company.(again remember: SVP and Canyon: don't get greedy, share with others).
So at the end of the day we may see 1.01 as our shareholder value either from creditors accepting the deal or the EC bringing more money from all investors to make the deal.
It become a war between York and EC. Who ownes the company is a mystery.
I envy you son of guns who is buying shares at these levels and the downside is minimal.
Following the June 3 meeting, at the Equity Committee’s request, the
Debtors moved quickly to facilitate the Equity Committee’s search for
potential third-party investors who would support an alternate plan at an
increased valuation. The Debtors executed confidentiality agreements
with five potential equity investors between June 7 and July 6, and are
currently negotiating a confidentiality agreement with a sixth.
http://www.kccllc.net/documents/0911233/0911233100719000000000001.pdf
OBJECTION OF THE OFFICIAL
COMMITTEE OF EQUITY SECURITY HOLDERS TO THE
DEBTORS' MOTION
http://www.kccllc.net/documents/0911233/0911233100716000000000039.pdf
A dual-track
process will yield savings to the Debtors' estates by avoiding redundant solicitation expenses.
Moreover, solicitation and tabulation of the Equity Committee's plan will involve limited
additional expense because there is only one voting class under the Equity Committee's plan
because all other classes are being paid in full or reinstated. Additionally, a dual-track process
benefits equity holders by offering a meaningful, side-by-side comparison of the two plans.
Good Job Geffman
Very Interesting read: Rulings Impact Hostile Takeovers of Bankrupt Companies' Debt
In some cases, the ability to buy claims has allowed strategic investors to gain control of
debtors. In these instances, claims trading plays the same role as a conventional takeover
contest outside of bankruptcy, but the outsider buys debt instead of equity. Claim buyers will
often want to advance a reorganization plan that provides for the conversion of debt into new
equity in the reorganized debtor for the purpose of transforming the claims buyer into a
controlling shareholder or largest shareholder. There have been a number of bankruptcy cases
involving a takeover fight.
http://www.hunton.com/files/tbl_s47Details/FileUpload265/2885/Rulings_Impact_Hostile_Takeovers.PDF
How absurd: POR:
Estimated mid-point value of Distributable Value in Exhibit F is $2.269 billion. If, for
example, shareholders voted to reject the Debtors’ Plan, and later recovered 9% of that
amount (as the Disclosure Statement suggests they might), shareholders would receive
$204.2 million. In contrast, if shareholders voted to accept the Debtors’ Plan, the 5% of
New Common Stock that they would receive would have a value of only $67.7 million,
far less than what shareholders might receive if they rejected the plan.
http://www.kccllc.net/documents/0911233/0911233100716000000000022.pdf
OBJECTION OF THE UNITED STATES TRUSTEE TO THE
DEBTORS’ REVISED DISCLOSURE STATEMENT DATED JULY 9, 2010
http://www.kccllc.net/documents/0911233/0911233100716000000000005.pdf
Excellent.
CHEMTURA CORPORATION
$ 0.65
CEMJQ
-0.01
Short Interest (Shares Short)
663,400
Days To Cover (Short Interest Ratio)
0.2
Short Percent of Float
%
Short Interest - Prior
3,588,500
Short % Increase / Decrease
-81.51 %
Short Squeeze Ranking™
Billionaire investor Nelson Peltz is seeking to raise $1.5 billion for a fund meant to buy minority stakes in public companies, Bloomberg said on Monday, citing two people with direct knowledge of his plans.
Peltz, 68, who oversees New York-based hedge-fund firm Trian Fund Management LP, is marketing the investment pool as a private equity fund because client money will be locked up for longer than with most hedge funds, the unidentified sources said.
Trian filed with Delaware to incorporate the fund, called Trian Partners Strategic Investment Fund LP, along with the general partnership that would run it on Jan 8, the report said, citing one of the sources.
The fund has already secured $433 million in commitments, one of the sources said. It is targeting sovereign wealth and pension funds, family offices and funds of funds, the report said.
Officials at Trian could not immediately be reached by Reuters for comment.
http://www.cnbc.com/id/38215540
Pick me, pick me (Chemtura)
Interesting offer $1.01 per share?
Must read:
Page 30 - Equity Offering
http://www.kccllc.net/documents/0911233/0911233100709000000000032.pdf
I agree 100% what Jax said: The balanced approach to the facts defines your character which few of us understand and we thank you for that Jax:
'Move On' is better judgement, instead of spreading rumors (or facts I don't know) like wally or CMM jumped out of the ship or not on the EC committee or Novachem sold all his position etc won't serve any purpose except few times of stock fluctuation and I strongly believe ihubbers have less impact on the outcome . But at the end of the day 'YOU' need to decide, what is best for your investments and I strongly suggest don't fall for the doom and gloom propaganda.
The way I see it, the name of the game becomes getting votes if both POR's are presented. It become too extreme either we win really really big or lose all.
1) As EC mentioned about 200 million over payment to bondholder etc, how is this going to be resolved? is it gonna flow to shareholders or the debtors just add more liabilities?
2) Why EC is so confident given the Goeffman reputation unless they think they win? is it because they got enough financing? Most of the BK's EC fights to get more value to shareholders by fighting against the valuation and in our case I am sure they could get us one dollar around through negotiations, instead they want to present their POR, fight for it. This game is getting very interesting.
3)Debtors are adding more stakeholders to vote for POR, why? Their game is obvious, they don't get our votes cause we align with EC (most of us bought post bk) so they decided to divide us post bk and pre bk? assuming they get few pre bk votes?
At the end of the day, it is not going to be easy for debtors either because both (Debtors and EC) POR's will give 100% to all creditors and other liabilities. Whose POR will win? I guess the time will tell
Eachholder of an Interest shall receive, in full and final satisfaction of such Interest, on the
Effective Date, one of the following treatments:
A. to the extent that Class 1213a for Chemtura Corporation votes to
accept the Plan, on the Rights Offering Record Date, each holder of
a share of prepetition common stock or equivalent Interest in Chemtura
Corporation shall receive its Pro Rata share (determined with respect to all
holders of Interests in Class 1213a) of 5% of the New Common Stock, subject
to dilution for the New Incentive Plan, and its Pro Rata share of the Rights
to participate in the Rights Offering; and
B. to the extent that Class 1213a for Chemtura Corporation votes to reject the Plan,
each holder of an Interest shall receive its Pro Rata Shareshare (determined with
respect to all holders of Interests in Class 1213a) of value available for
distribution after all Allowed Unsecured Claims have been paid in full in
accordance with the terms of this Plan and the Disputed Claims Reserve has,
Diacetyl Reserve and Environmental Reserve
My request to all: Please be courteous, some of the folks are still own a lot and we all know the game and don't need to bash or pump everyday. Is it really worth it?
This Court should not allow the Debtors to lock themselves in to a plan in the
face of an alternative plan that injects $470 million of new cash in the Debtors, pays creditors in
full, in cash, and provides the fulcrum security holders with value well beyond what they would
otherwise receive under the Debtors' Plan.
http://www.kccllc.net/documents/0911233/0911233100709000000000011.pdf
The Debtors currently are actively negotiating with the United States government
in an effort to settle all environmental claims asserted on behalf of the EPA and the other federal
agencies covered by the United States claim. The Debtors’ current plan is to attempt to resolve -
either consensually or through claims objection and estimation proceedings - the United States
claim in advance of confirmation of a plan of reorganization. The Debtors are pursuing a similar
course of action with respect to the states that filed proofs of claim. Debtors believe that it is
important to resolve both the government claims and the $1.7 billion overlapping Environmental
Claims issue in the near term, in order to avoid delays in confirming or consummating a Chapter
11 plan and making distributions thereunder.
http://www.kccllc.net/documents/0911233/0911233100528000000000036.pdf
All IMO
First and foremost, try to implement or ignore what Jax said in his post Jax Post
Either you are in or out by Jun 17th.
Indicators:
1) Chemtura is working with all the parties to come up with a agreeable POR by next month, which says a lot, since the company don't want to drag further and I am hoping for the best.
POR News
2) EC since day one is saying 'Preserving the equity intact'
3) Valuation of the company: The real story comes out on or after Jun, 17th, but read the Madclown's EBIDA valuation which are pretty conservative numbers.
Madclowns Valuation
So what is the valuation going to be for share holders.
It is a wild guess, this could be anywhere between $1 to $7 per share.
What if it comes to the lowest end? That means heavy dilution but a clean company which real values goes to $2-$3 and higher if you wait few months not get scared of the numbers after the company comes out of BK.
IMO - In any scenario 'We are the winners'
This is 'THE BEST NEWS', Chemtura public statement confirms that we shareholders will prevail..
Chemtura Comments on the Status of the Development of its Plan of Reorganization
PHILADELPHIA, May 25, 2010 (BUSINESS WIRE) --Chemtura Corporation, debtor-in-possession (Pink Sheets: CEMJQ) (the "Company" or "Chemtura"), announced today that it is in active and ongoing discussions with its Official Unsecured Creditors Committee and Official Equity Committee in an effort to reach a consensual Chapter 11 plan of reorganization. Additionally, today Chemtura said it is finalizing an agreement with an existing ad hoc committee of bondholders on confidentiality terms that will allow Chemtura's largest bondholders to engage in direct negotiations with the Company regarding the terms of a Chapter 11 plan. Chemtura is hopeful that it will successfully bring together the interests of all its stakeholders in a consensual plan of reorganization, which will permit an exit from Chapter 11 in the near term, thereby maximizing value for all of them.
As currently contemplated, the plan of reorganization will provide for emergence of Chemtura from Chapter 11 and continuation of all worldwide operations of Chemtura and its subsidiaries. The plan as currently contemplated will specify treatment for funded debt obligations, trade claims and litigation claims, including providing treatment for diacetyl litigation claims in an agreed or judicially estimated amount. Chemtura also expects that the plan will provide for payment of creditors in the form of cash or common stock in a reorganized, publicly traded company. While there can be no guarantee regarding the value or type of recovery available to any class of creditors or interest holders under the plan, it is anticipated that creditors will be paid at or near the full value of their claims and there may well be recovery available for holders of Chemtura's common stock. Chemtura continues to discuss the specifics of the plan with its stakeholders, including the valuation of reorganized Chemtura, the specific form of consideration that will be available to various types of constituencies and the funding of such consideration.
Chemtura's Chief Executive Officer, Craig Rogerson, commented, "Our intent is to emerge from Chapter 11 as quickly and efficiently as possible. We believe that filing a plan of reorganization with the support of all of our major constituencies is the best way to accomplish this goal. Chemtura intends to file a plan of reorganization by June 17, and accordingly intends to file a motion to extend its exclusive rights to file a Chapter 11 plan, and solicit votes thereon, in order to facilitate the Chapter 11 process."
For Chemtura to emerge from its Chapter 11 proceedings, a plan of reorganization will have to be confirmed by the bankruptcy court after solicitation of votes thereon. The plan of reorganization is expected to include closing conditions that will need to be satisfied before emergence. This press release is not a solicitation of an acceptance or rejection of any future Chapter 11 plan within the meaning of section 1125 of the Bankruptcy Code.
Chemtura Corporation, with 2009 sales of $2.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. Additional information concerning Chemtura is available at www.chemtura.com.
Here is the catch.
It is a profitable quarter and they are preparing ground for exiting BK.
The operating loss for the first quarter of 2010 was $124 million compared with an operating loss of $22 million for the first quarter of 2009. The increase in the operating loss is primarily due to a $122 million charge for changes in estimates related to expected allowable claims, (some of which may be ultimately offset by potential insurance recoveries), an $8 million increase in depreciation and amortization (primarily due to accelerated depreciation related to restructuring within the flame retardants business), and a $9 million increase in SGA&R, which was offset by a $34 million increase in gross profit and a $3 million reduction in other costs.
$10 per share.
Interesting read and it confirms Jax findings.
It seems to be EC and UBS provided some kind of valuation and Analysis to Debtors and Creditors about Chemtura.
Pages 94 and beyond ( Interesting lines)
UBS valuation
Debt re-instate
UBS presentation
Review HLHZ equity analysis
http://www.kccllc.net/documents/0911233/0911233100423000000000001.pdf
We know this news prior and it is out on reuters
http://www.reuters.com/article/idCNSGE63I0K020100419?rpc=44
Chemtura seeks court nod to settle 2004 class action suit
Mon Apr 19, 2010 12:47pm EDT
Stocks
Chemtura Corporation
CEMJQ.PK
$1.50
+0.04+2.74%
12:00am PDT
April 19 (Reuters) - Bankrupt U.S. chemicals maker Chemtura Corp (CEMJQ.PK) sought court approval to settle a 2004 securities class action lawsuit for about $11.4 million, court papers showed.
The lawsuit, filed in a Connecticut court, was led by Pierre Brull and William Ashe, who represented former shareholders of Witco Corp. In 1999 Witco merged with Crompton & Knowles Corp, which is now called Chemtura.
The lawsuit alleged that Witco shareholders entered into a deal with Chemtura based on false and misleading financial statements and that Chemtura had breached its fiduciary duty to Witco's shareholders.
The suit alleged that during the period between Oct. 26, 1998, and Oct. 8, 2002, Chemtura issued materially false and misleading statements concerning its reported financial results, competition, pricing, sales and margins.
In court papers filed on Friday, Chemtura said the settlement amount will be paid solely from insurance and will not prejudice any of the company's stakeholders.
Chemtura's U.S. operations, which included 26 affiliates, filed for bankruptcy protection last March because of a significant decrease in liquidity caused by sharp declines in order volumes.
Good one Jax.
IMO - There would be more write-offs now till the end of the third quarter, so don't be surprised to see the diluted numbers.
cemjq record - 19 minutes and 53 seconds - no trades
I don't remember seeing this before
Short Interest (Shares Short) 2,135,200
Days To Cover (Short Interest Ratio) 1.9
Short Percent of Float 0.89 %
Short Interest - Prior 2,601,300
Short % Increase / Decrease -17.92 %
------------------
200-Day MA ($ 0.95 )
50-Day MA ($ 1.38 )
FEDERAL AND STATE ENVIRONMENTAL CLAIMS AND DEBTORS’ THIRD TIER I OMNIBUS
Adjourned to 18th May - Chemtura might be working on a deal
http://www.kccllc.net/documents/0911233/0911233100413000000000018.pdf
Visteon judge won't halt benefits termination - What about Cemjq any thoughts?
Visteon, a top supplier to and a former subsidiary of Ford Motor Co., argued at a hearing last year that the retiree benefits were one of its largest liabilities and posed a significant obstacle to a successful reorganization. The company claimed that the retiree health and life insurance subsidies constituted a liability of about $310 million.
According to court records, benefits for retirees of the two Indiana plants alone cost the company more than $1 million a month.
But Vicki Jo Lady, a maintenance worker employed by Visteon for 33 years, said she and her husband both suffer from chronic illnesses and had to cut back on medication as they faced the loss of their employer-sponsored coverage. Lady, 58, began sobbing as she described the choice of paying for COBRA coverage and making house payments and buying groceries.
"They don't look at me as a person, they look at me as a piece of paper," she told Judge Christopher Sontchi before offering a tearful plea to Visteon officials.
"You're messing with people's lives here," she said. "... You're intelligent people; quit taking from people out of greed."
While acknowledging the decision to terminate benefits will cause hardship for some, Visteon attorney Steve McCormick said the appeal is bound to fail, and that further delays will only cause confusion for retirees exploring other health plans in advance of the April 1 benefits termination.
After a three-hour hearing, which included testimony from Connersville mayor Leonard Urban, Sontchi stood by his earlier ruling, in which he determined that the retirees did not have vested rights in the benefits and that Visteon had the ability to terminate them unilaterally.
"Needless to say, this is an extremely serious issue, the court is well cognizant of that," said a somber Sontchi. He agreed with Visteon that the retirees had not met the standards for him to halt implementation of his ruling, including the likelihood that their appeal would be successful.
http://finance.yahoo.com/news/Visteon-judge-wont-halt-apf-2504398344.html?x=0&.v=3
Don't read too much into it.
It is always (mostly) better opportunity prompts people to move on.
Thanks Jax and SullY, good digging..
Why did cemjq hire
Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co
http://en.wikipedia.org/wiki/Gross,_Kleinhendler,_Hodak,_Halevy,_Greenberg_&_Co.
Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co., (a.k.a. "GKH"), founded in 1979, is one of the largest law firms in Israel.[1] Its offices are in Tel Aviv.
On January 1, 2001 the law firms of Prof. Joseph Gross, Hodak, Greenberg & Co. and Kleinhendler & Halevy merged to form Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co., Israel's leading corporate and securities law firm.
The firm of Prof. Joseph Gross, Hodak, Greenberg & Co. was founded in 1979 by Prof. Joseph Gross, one of Israel’s most experienced corporate, securities and tax attorneys, and a professor of law at Tel Aviv University.[opinion needs balancing] The firm advised the Israeli branches of several global corporations, as well as major Israeli conglomerates. The firm represented the Government of Israel on the flotation of securities of Israel’s largest banking institutions. Professor Gross was joined by David Hodak in 1983 and Eytan Greenberg in 1986.
Founded in 1984 by Gene Kleinhendler, formerly of the U.S. Securities and Exchange Commission, the firm of Kleinhendler and Halevy focused on the area of high technology venture finance law. Amir Halevy, joined the firm in 1986. The firm specialized in capital markets in Israel and the United States, foreign investments in Israel, representation of high-technology companies in their commercial ventures, the investments of venture capital funds in Israeli companies, private offerings in Israel and the United States, mergers, acquisitions, joint ventures and licensing. The firm was also active in privatization.
Chemtura has entered a long-term strategic sourcing agreement with Albemarle.
Under the agreement, Chemtura will source BA-59P, DE-83R, Firemaster 2100, n-propyl bromide and sodium bromide from Albemarle. Additionally, Albemarle is assigning its brine interests in Chemtura’s West Brine production unit located in Union County, AR, USA, to Chemtura, which will further strengthen the company’s bromine operations and maximise productivity.
The parties have also settled ongoing decabromodiphenyl ethane and bromine litigation, which will end the dispute over Chemtura’s right to sell decabromodiphenyl ethane to the global market. Under the settlement agreement, each company will grant a cross license for their respective decabromodiphenyl ethane products. The agreement has been executed by both parties but is pending Chemtura’s Bankruptcy Court approval.
The strategic agreement will allow Chemtura to further strengthen operations at its most productive brine field in South Arkansas. In addition, this agreement will provide greater opportunities for the company to reinvest in new, innovative flame retardants and brominated performance products designed as part of its “Greener is Better” programme.
Long term the chemtura looks great, it is the short term that it gets dizzy.
Today's stock price = Uncertainty
Release of POR = Certainty (Clarity)
Certainty = Reset of stock price (which happens very fast)
Until then we have to have patience.
Thanks Wally right on point.
Between Frank and CERT Sofa junkies, 10.5 Billion worth of claims gone from Chemtura Claims Register.
Good Day Chemturians
Thank You Judger Gerber.
Tomorrow's Schedule:
http://www.kccllc.net/documents/0911233/0911233100406000000000017.pdf
Very good post Jax,
"And in BK court where the Judge is also the jury is not a recipe for success."
Page 10
Although the Debtors recognize that there are two insurance coverage actions currently pending, insurance
coverage may be considered by the estimation experts because it is relevant and important for plan negotiations and
development. If Ungerer or any other party believes it is necessary, then, to understand the insurer’s defenses to
coverage, they will have the opportunity to serve the necessary discovery in the six weeks currently provided for fact
discovery in the CMO. Further, in July 2009, the Debtors have already provided Ungerer, the Humphrey Farrington
Claimants, Citrus, and all other parties to the Smith Adversary Proceeding, Adv. No. 09-01282, the applicable
insurance policies. These parties also received the Debtors’ interrogatory responses regarding their insurance
policies, and had the opportunity to participate in the deposition of Jeffrey Lenser, Esq., the Debtors’ insurance
coverage counsel. Although the Debtors have recently discovered (and will produce without delay) two additional
(more minor) insurance policies that increase the insurance coverage available to cover the Diacetyl Claims,
Ungerer, the Humphrey Farrington Claimants, Citrus, and all other parties to Smith Adversary Proceeding have had
all other relevant documents for nine months.